HomeMy WebLinkAbout2015-2-9Minutes for February 9, 2015, adopted July 8
Town of Nantucket
Audit Committee
www.nantucket- ma.gov
MINUTES
Monday February 9, 2015
4 Fairgrounds Road, Training Room — 1:00 p.m.
Staff: Libby Gibson, Town Manager; Gregg Tivnan, Assistant Town Manager; Brian Turbitt,
Finance Director; Martin Anguelov, Assistant Finance Director; Deb Weiner, Treasurer;
Bob Dickinson, Assistant Town Accountant; Elizabeth Brown, Tax Collector; Terry
Norton Town Minutes Taker
Attending Members: Rick Atherton, Bruce Miller, Matt Mulcahy
Absent Members: None
Auditor: Anthony Roselli, Roselli, Clark & Associates (RC&A) by remote call
Documents used: Copy December 16, 2014 minutes;
1:03 p.m.
1. December 16, 2014 — Motion to Approve. (made by: Mulcahy) Carried unanimously
Atherton — This committee's focus is on the operational reviews and comments.
Roselli — Started on page 8 with Findings and Recommendations:
Unemployment Filings: For several years reports were not filed correctly as the Town was using an incorrect
rate on the form resulting in an underpayment to the Commonwealth. This is money the Town owed to the
Commonwealth; the Town had to pay this money in FY2014, thus creating a $235,000 deficit in the budget.
Turbitt — Nantucket is a chargeable employer, which means every quarter they pay a tax like many private
businesses. Because they are a municipality, they get a lower rate than other government entities. The Town is
required to pay a percentage on every dollar of an employee's entire wage as opposed to paying a percentage
only on the first $14,000 and employee earns. The argument for going this way is it insulates the employer
when there is a particularly high year of unemployment claims. The system was put in place by his
predecessors; but it falls on him to review and redesign the process. Another thing they are looking at is ways
to make seasonal employees ineligible for unemployment.
Gibson — The Town is being strict about not allowing the seasonal employees to work more than 15 weeks of
the season. A problem is that some departments need seasonal employees for more than 15 weeks; in certain
situations they are allowed to work beyond the 15 weeks. We try to stagger it.
Turbitt — Noted that students who work seasonally are not supposed to be eligible for unemployment.
Miller — If they don't go back to school, it is questionable whether or not they are eligible.
Turbitt — Explained what is being done to mitigate seasonal employees from filing for unemployment.
Mulcahy — Asked if the $235,000 included penalties.
Turbitt — There were interest and penalties charges. They actually paid the penalties and interest out of an
account that was designated to cover interest costs.
Roselli — Some towns self - insure, some don't. That was the most significant of the charges. It seems to be
under control at this time.
Health Insurance Trust: Determined that when contributions to the fund are made by the Town and
employees, the fund equity in the trust is being put as one and not separated into Town and Employee
portion. It is important to know that.
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Minutes for February 9, 2015, adopted July 8
Turbitt — We have actually created the accounts to do this. The next step is to go through the matrix to
separate the employer/ employee.
Roselli — It isn't critical unless there is the event the current arrangement is terminated.
Personal Property Tax Motor Vehicle and Boat Excise Receivable Balances: -There are receivables dating back
to the 1980s. This would be the final step of cleaning up the general ledger. There are a lot of old accounts
and they need to be cleaned up.
Receivable Reconciliation: This is again a clean -up of the process. The timing is when the entry is done: if it is
made in September it should still be dated as if it were done June 30. Presented a situation where this dating
would be used rather than calling it a "timing item."
Cash Reconciliations (continued from prior year): Repeat from the prior year; there are a number of
reconciling items. These net to an immaterial amount. Realizes Mr. Turbitt is working on this and should be
cleared up before the next audit.
Turbitt — He suggests doing it item by item for better tracking.
Roselli — Closing Process: Working with the Town Acct on this; it is a work in progress. Hopefully this too
will be cleaned up before the next audit.
Capital Projects: The Town presently carries about $250,000 in capital projects balances dating back to
FY2004.
Atherton_ Asked if these were found in addition to last year.
Roselli_ No. This was on a report several years ago and the Town reconciled a number of them. There are
still a few left.
Gibson — Everything is scheduled to be cleaned up.
Mulcahy — Asked if any of this will be reappropriated.
Turbitt — Yes or used to finish the projects.
Roselli — Next is Operational Reviews. The biggest issues are Payroll and Department of Public Works
(DPW).
Payroll Process:
Turbitt-- They have been working on steps to get Our Island Home (OIH) and the police systems to upload
into Munis to see if the system can be used more globally. Once we are confident OIH and police will up
load, we will roll them out, with DPW and Fire to follow in the near future. The majority of other payroll
issues noted in this report have been cleaned up. Have cleaned up a lot of the DPW issues; explained what's
been done.
Roselli_ The trend is getting positive here. The bond rating has gone up. In the last 24 months, there has
been a different path in the reporting process.
Miller — Chapter 90 was skipped over.
Turbitt — Town Engineer Silvio Genao is working with him and Mr. Dickinson to file the project reports
when the projects are completed as recommended by Mass Department of Transportation.
Roselli — Mr. Turbitt has also been working on the internal audits; he is looking forward to the reports on
those.
Miller — In regards to properties which have septic systems but are on Town water being billed.
Turbitt — Everyone on sewer and receiving Town water are being billed for sewer.
Gibson — Properties with sewer but not on Town water are being billed a flat rate bill for sewer. If they have a
septic and are not on Town water, they don't get billed for sewer.
Turbitt — This was about making sure the sewer and water departments are communicating about who is
hooking up to Town sewer. Some customers were falling through the cracks by not getting billed, but this is
no longer the case.
Atherton — There are people abutting a sewer line but are not hooked up, which they should be, who aren't
being charged while they go through the 2 -year process of getting hooked up.
Gibson — The idea is that people abutting a sewer line are required to hook up to it; that is being handled by
the Health department.
Turbitt — Sewer and Water now are communicating in a timely manner so that they know when someone
hooks to sewer.
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Minutes for February 9, 2015, adopted July- 8
Atherton — Asked if there is hope in resolving the Airport Fuel Revolver, like getting rid of them.
Turbitt — Stated this is the first he's heard about consideration to get rid of the Airport Fuel Revolver.
Roselli — Stated that fuel revolvers are very confusing and he doesn't know of a simple solution due to the
unpredictability of estimating their revenues and expenses. He and Mr. Turbitt should take some extra time to
look at this during the interim review; they should get a better understanding and come up with a process that
works better. In the years before, when fuel sales were reported in the Airport Operating Budget, deficits and
retained earnings weren't available to back up these deficits. He believes having everything in the Airport
Enterprise Fund Operating Budget streamlines reporting, but the advantage of having a Fuel Revolver is to
avoid negative impacts on operating budgets in the case of fuel price fluctuations.
Gibson — They will have to discuss that with the Department of Revenue (DOR) The big issue was the
financial planning of fuel prices, which are volatile by nature.
Roselli — If a better plan can be created, he believes the DOR will be on board.
Turbitt — This discussion would have to involve the Airport Manager. Explained how the special legislation
exempts them from one of the caps but not the other revolving fund cap. That missing exemption creates
problems with all the revolving funds
X. DATE OF
Roselh — Suggested establishing a time to meet with the BOS: an audit committee meeting in the morning
and then a meeting with BOS that night so the auditors can physically attend both meetings.
Gibson — She will figure out a time after Town meeting for that. Next meeting would typically be the 24`h
but she won't be here. She had noted March 31 at 9 a.m.
Next Meeting Date: Tuesday March 31 9 a.m.
Motion to Adjourn: 1:44 p.m.
Submitted by:
Terry L. Norton
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